Why this tiny one-bedroom cottage sold for $5.5 million

Sydney is a city of views, and if you want one, you better be prepared to drop millions to get one.

The latest case-in-point is this run down one-bedroom, one-bathroom cottage on the Northern Beaches that fetched a whopping $5.55 million at auction over the weekend.

The dilapidated home has just 70 square metres of internal living space and no parking, but it's what's out the back that saw the price guide set to $4.8 million.

Image: Domain

The 1940s fisherman cottage is set on the clifftop at Queenscliff, overlooking Freshwater beach with completely unobstructed views -- and it's the guarantee no new builds will pop up and ruin the vista that's driven the price high.

Image: Domain

On the weekend, 100 people were at the auction to watch five registered bidders compete for the property. The result was a sale of more than $700,000 above the guide price, and $270,000 past reserve.

Listing agent Anthony Calacoci of Belle Property said the home had garnered quite the bit of attention, and "all eyes were on Pavillion street."

Image: Supplied

He was "a bit nervous for myself and for the vendor -- the way it started, there was a low ball offer thrown out there."

That offer for $2.8 million wasn't accepted by auctioneer Vic Lorusso. The starting bid began at $4.5 million, and luckily so, as Calacoci joked, "otherwise I was headed straight for that cliff!"

Image: Domain

"[The auction] was exciting," Calacoci told 9Homes. "Once it got going it was finished straight away. Straight over the reserve, bang, bang, bang and onto the final figure. All the neighbours were happy as they’ve invested a lot of money into that street.”

It's the first time the property was put to market in 40 years, the cottage a near-original full brick home that doesn't even offer off-street parking.

Image: Domain

"It really exceeded our expectations," says Calacoci. "Because it was a one bedroom home with 70sqm of living area and no parking, plus in need of a lot of work." But those are multi-million dollar views.

Features of the home include high patterned ceilings, picture rails and timber flooring. There is a light-filled living room with open fireplace, tidy kitchen and a bathroom clearly in need of a refresh. The one bedroom is spacious, and there are lock-up storerooms under the house.

Image: Domain

Auction day even had a little help from the heavens. Calacoci said the weather was rainy and overcast, then just before the auction, the skies opened up to reveal blue sky. "It was beautiful weather, even though one of the bidders was hoping it would rain!"

While Calacoci cannot comment on what the new owner plans to do with the property, the neighbours include a duplex, and a boutique block of four luxury apartments.

Image: Domain

The land size is 339 square metres, but it's like the beach is in the back yard.

Image: Domain

Calacoci mentioned an expat at the auction likened the water at Freshwater beach to those of Fiji. "Freshwater beach seems to have a different blue water, it's beautiful."

The views are spectacular, and guaranteed to the new owners. Watch the video below of the auction.